A FTSE 250 dividend stock that could help you quit your job

This top FTSE 250 (INDEXFTSE: MCX) stock is in great shape to deliver delicious dividends long into the future.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

In a recent article I took the chance to have a look at two terrific FTSE 100 income shares with enough ‘wow’ factor to help share investors ditch the day job.

In this piece, I plan to inform you of another similarly-liberating share, this time from the London Stock Exchange’s second tier: PageGroup (LSE: PAGE).

Packed with potential

I have touted PageGroup as an exceptional dividend share for a very long time now. I’m taken by the impressive progress it is making across the globe, a detail that was again laid bare in its latest trading statement last week.

The FTSE 250 recruiter saw gross profits charge 16% higher between April and September to stand at a fresh quarterly record of £208.2m. The UK again proved problematic for the company, with profits here ducking 1.9% year-on-year. However, its home terrain accounts for less than a fifth of profits at group level, giving its top line a terrific buffer against the on-going political and economic maelstrom in Britain.

It’s this foreign exposure that has led City analysts to predict earnings will continue growing by double-digit percentages — rises of 16% and 12% are forecast for 2018 and 2019, respectively.

And the outperformance of its so-called Large, High Potential markets in particular, and the vast investment it’s making in these regions, convinces me that profits should continue ripping higher at quite a pace.

Big on foreign shores

PageGroup has packaged up five of its territories into its Large, High Potential market category — Germany, Greater China, Latin America, South East Asia and the US. And each and every one of these destinations printed record gross profits during Q2.

The company is going full steam ahead to try and latch onto the favourable demographic and economic factors in these geographies to try and drive profits. In the last quarter, it opened a new office in Vietnam, the fifth country from which it operates in South East Asia.

And PageGroup has a view of hitting a global headcount of 10,000 under its current growth plan, up from 7,457 presently.

Special dividend star

Thanks to its great profits outlook and rock-solid balance sheet (it had net cash of £85m at the end of the second quarter), the number crunchers are expecting the special dividends to keep on coming during the medium term.

Last year’s total payment of 25.23p per share is anticipated to rise to 26.5p next year, and again to 29.1p in 2019. This means that yields stand at a chunky 4.4% for this year, and 4.8% for next year. And who would bet against dividends continue beating those of the broader market beyond then?

PageGroup’s stunning share price run since the start of 2018, during which time the company’s value has swelled by more than 30%, indicates the growing belief the investment community has in the company’s long-term earnings picture.

That said, I would argue that the recruitment giant still remains undervalued as of today with PageGroup carrying a forward PEG ratio of just 1.2 times. This leaves plenty of scope for further share price gains in the months ahead.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

Could the 9.8% M&G dividend yield get even bigger?

Christopher Ruane reckons that, although the M&G dividend yield is already close to a double-digit percentage, it could get better…

Read more »

Investing Articles

How much passive income could I earn by putting £380 a month into a Stocks and Shares ISA?

Christopher Ruane explains how he'd aim to turn a Stocks and Shares ISA into four-figure passive income streams each year.

Read more »

Investor looking at stock graph on a tablet with their finger hovering over the Buy button
Investing Articles

2 passive income stocks I’m buying before an interest rate cut

With the market expecting interest rates to fall in August, time might be running out for investors looking to buy…

Read more »

Investing Articles

If I’d bought Rolls-Royce shares a year ago, here’s what I’d have now

Rolls-Royce shares have been the big FTSE 100 success story of the past 12 months and more. And there's still…

Read more »

Young female analyst working at her desk in the office
Investing Articles

If the Dow’s heading for 60,000 by 2030, can the FTSE 100 index hit 12,000?

Strategist Ed Yardeni predicts a 50% rise for America’s Dow Jones Industrial Average over six years. Can the FTSE 100…

Read more »

Investing Articles

Is the National Grid share price a once-in-a-decade opportunity?

The National Grid share price looks like a bargain. But there’s much more for investors to think about than a…

Read more »

Investing Articles

Here’s why the Rolls-Royce share price should keep gaining!

The Rolls-Royce share price is up 185% over the past 12 months, but there are a host of tailwinds that…

Read more »

Mature Caucasian woman sat at a table with coffee and laptop while making notes on paper
Investing Articles

Buying 1,852 shares in this ultra-high yield FTSE 100 income stock would give me £1k a year

Harvey Jones is keen to load up on this blue-chip income stock that pays the highest yield on the FTSE…

Read more »